falala1

I am not backing up what you are saying. VCs want huge returns in a compressed timeline.

This comes at the cost of what is good for the company. Using Facebook as an example, you would sell Facebook when Viacom wanted to buy it for 75MM. Great huge return for investors for such a young company. Can turn around and show your fund had a huge exit. Especially great for a seed fund but terrible for the founder and the employees. Luckily, Zuckerberg had control and could thwart investors desire for a quick sale. [1]

I am totally not against VCs making a return but what I am against is VCs forcing premature exits. We may never know what Twitter could have been if the ecosystem stayed in-tact and they figured out how to monetize the whole thing and kept the user growth trajectory in place.

[1] http://www.businessinsider.com/all-the-companies-that-ever-t...

Not really how VCs work. Each VC is made up of funds. When EV was CEO and Twitter was the size it was, a lot of your fund's success might hinge on one or two companies in your portfolio. Without them exiting, it is hard to raise the next fund. If you can cash out your companies, show a huge return, it gets easier to raise your next fund at favorable terms.

Zuck was about to be fired as well. The board realized they could not fire him because he had a very iron clad founder friendly legal construct. That's when Sandberg came into the picture. Also, Zuck made Sandberg promise she would never go after his position before she came on.

This is a great example of how a company was undone by greedy VCs. A little history lesson. The founders of Twitter really believed in a vibrant ecosystem for Twitter. They gave the developer community a slew of APIs, gracious quotas, and support.

The ecosystem thrived and created dozens of major companies that made Twitter truly useful. The user numbers grew as well because those very same companies marketed their new and innovative solutions. Then Ev was fired. Dick was brought in and month of after month they lay waste to the ecosystem. Dozens of companies died and hundreds of millions of dollars in VC money was lost.

Why? Fred wanted to cash out with a lot of other VCs. They wanted to turn Twitter into a media company. Run up the revenue and go IPO to dump their shares. Sure, if Twitter went along with their founders vision it could have been much bigger over time but going that route didn't help Fred cash out his 100x return and report back to his LPs.

The reality is founders spend years even getting off the ground. The "board", represented by VCs, rarely add value to the operation and vision of the company. They invest because they believe in the vision. Make sure that reality is in writing so people like Fred don't stab you in the back so they can cash out early.